City Bowl and CBD buck the trend

THE SECTIONAL title sector continues to be active in the CBD and surrounding City Bowl suburbs despite a strained economy. Strong demand and solid capital retention and growth are driving the demand for sales and rentals.

The total value of sales for last year increased by 11%, from just over R985.859 million to well over R1 billon, says Billy Rautenbach, sales director for Seeff ’s operations across the area.

The average price a unit fetched increased by 18%, from R2.2m to almost R2.6m.

“There is also now a clear shift to younger buyers in the CBD and suburbs such as Tamboerskloof, Oranjezicht and Higgovale,” she says.

“Up to 30% of buyers over the past year fall into the under-35 age bracket and a further 40% are under 50.

“This year is already off to a busy start with January sales of R205m for the whole area, almost 40% more than the R148m for January last year.

“Any well- priced property still sells quite quickly, often in well under a month.”

New developments, despite the slightly high price tags are also selling well. Rautenbach says agents expect the area to further cement its Blue Chip status and investment value.

And the area is rewarding investors’ patience.

“Despite flat year- on- year sales numbers, the overall value generated reached a record high of around R2.36bn last year, compared to R1.16bn in 2010 and 19% more than the R1.9bn generated in 2015. “In the post-2007/8 period, the CBD and City Bowl suburbs were among the worst performing in the city. Properties sometimes sat on the market for up to 250 days.

“By 2015, the time it takes to sell had improved to below 50 days on average. Last year, despite the worsening economy, it dipped further to around 42 days on average, indicating quite a healthy market.

“Five years ago, sellers were getting offers of 10-20% below the listing prices on average. By last year, this had halved to around 5-6% despite the higher prices achieved.

“In reality, about half of all properties are still sold at almost full price. A notable surprise is the phenomenal year-on-year growth in the average selling prices of 17-18% measured overall for the market.”